Oliver Staley
GLAXOSMITHKLINE sold half its stake in Aspen Pharmacare of South Africa for R10.5 billion to invest in new priorities as the UK’s largest drugmaker reorganises.
Glaxo sold about 28.2 million shares in Africa’s largest pharmaceutical manufacturer through institutional investors for R372 a share, Johannesburg-based Aspen said on Friday. That’s almost eight times their value when they were issued to Glaxo six years ago. Aspen stock fell as much as 6 percent, the most since June.
Glaxo is reorganising amid a slump in sales and profit as its best-selling product, the asthma drug Advair, faces increased competition in the US. The company completed a deal with Novartis last year to sell its oncology franchise and acquire the Swiss drugmaker’s vaccines business. Glaxo sold the same number of Aspen shares in November 2013, raising about R7bn. Its stake is now about 6.2 percent. The company could not sell more shares for at least 180 days, Glaxo said.
“Our investment in the company has grown in value significantly,” Glaxo chief financial officer Simon Dingemans said last week. “As we continue to reshape the group around our core franchises and drive the benefits from the Novartis transaction, optimising our financial flexibility to invest behind these priorities is key.”
Aspen issued shares to Glaxo in May 2009 in return for the rights to distribute the London-based drugmaker’s products in South Africa and as part of an agreement to market and sell medicines in sub-Saharan Africa. The stock traded at R48 that day.
Aspen, which supplies medicines in about 150 countries, has spent more than $2bn (R25bn) in the last two years, buying assets from London-based Glaxo and Merck to expand its geographic reach. The stock has climbed 37 percent in the last year, and traded 4.43 percent lower at R388.50 at the JSE close on Friday. Glaxo’s shares traded 0.2 percent lower at £15.45 in London. Citigroup and UBS acted as joint bookrunners for the share sale. – Bloomberg